Aetna CEO says Louisville employment will stay flat or grow after Humana sale
LOUISVILLE, Ky. (WDRB) -- Aetna CEO Mark Bertolini told stock analysts on a conference call Monday that the "very capable" leaders of Humana's Medicare-driven government business will remain in place following Aetna's planned $37 billion purchase of Humana.
"Louisville will be an important site for us, and we anticipate, given the size of the revenue in that location, that we will at least maintain employment if not increase it," Bertolini said.
His comment came in response to a stock analyst who said "merging the Louisville infrastructure into the rest of Aetna" might be good financial move.
In announcing the sale Friday, Aetna and Humana said Louisville would become the headquarters of the combined company's Medicare, Medicaid and TRICARE businesses, representing about 56 percent of the company's $115 billion in annual revenue. The corporate headquarters will continue to be Aetna's base in Hartford, Conn.
Despite the assurance that employment in Louisville will not drop, Aetna executives avoided getting into the details of how jobs might be reshuffled within the new company.
By 2018, Aetna anticipates getting $1.25 billion of annual cost savings by combining the companies -- about $1 billion of which is reduced operating expenses, executives said Monday.
During the call, an analyst asked if the operating savings would come from consolidating the Aetna-Humana government business in Louisville and the commercial insurance business in Hartford.
Aetna's Bertolini declined to discuss the specific affect on jobs but said: "You're in the right direction, the way you're thinking about it."
Executives also said Monday that the Humana brand name will continue after the sale.
And while Aetna anticipates getting the deal approved by regulators, Humana would be owed a $1 billion break-up fee if it does not go through. Also, the deal includes a provision that would allow either company to back out if it receives a better takeover offer from another company, executives said.
Until the deal closes in the second half of 2016, nothing changes for employees at either company, executives said.
"I believe that Humana's employees will feel energized and motivated by Aetna's strategy and culture," Humana CEO Bruce Broussard said.
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